Kevin Drum

Friday Cat Blogging - 4 February 2011

| Fri Feb. 4, 2011 4:00 PM EST

The fence is becoming an increasingly popular hangout spot. A couple of days ago both cats hopped up at once and created a logjam. Domino couldn't figure out how to get down with Inkblot in the way, so she headed off in the wrong direction and got stopped by the rose bush. After convincing herself there was just no way through a big mass of thorns, she turned around and hopped down onto the air conditioning unit. Apparently Inkblot hadn't counted on that bit of trickery, which meant there was no longer any point in blocking the way. So he headed over to the bird bath and hopped down too. I still don't know for sure how they get up there, though.

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Housekeeping Note

| Thu Feb. 3, 2011 11:00 AM EST

I'll be up in San Francisco today and tomorrow hobnobbing with the powers that be at Mother Jones. I might have some free time to post a thing or two, but I'm not sure about that. At best, posting will be light — though catblogging will appear at its regular time. I'll be back on Saturday.

Anti-Urbanism, Take Two

| Wed Feb. 2, 2011 8:38 PM EST

Earlier today I wrote about the anti-urban bias in American public policy. Is it the fault of the Senate, which overrepresents the interests of rural states? Stephen Smith comments:

I think all this talk of federal policy is misguided. Writing about the federal government sells well in journalism since it reaches the widest audience, but even taking into account the feds’ massive power grab over the last century, the real action is still at the local level. Local property tax distortions favoring single family homes are widespread and egregious, but orders of magnitude more ink gets spilled about the relatively ineffectual mortgage interest tax deduction. Fannie Mae and Freddie Mac’s refusal to fund mixed use developments is unfortunate, but it’s nothing compared to the almighty parking minimum. So while obviously the rural-biased Senate isn’t doing urbanism any favors, the nation’s Greatest Deliberative Body is next to meaningless when compared to lowly municipal governments.

Two things. First, it's the world's Greatest Deliberative Body, pal, and don't you forget it. And second, good point!

But what's the breakdown? I think everyone agrees that local land use regulations are a big issue, but are they really the predominant issue? I don't know. But Stephen makes an interesting argument that it all goes back to the early 20th century, before the feds had any involvement at all, and comes down to anti-el sentiment. I guess I'd question that, since Europeans and Asians built up pretty dense urban areas without els (at least, none that I've ever seen), so I don't know how that could really be the key factor. But it's interesting anyway! Go read it.

Yes, Our Problem is Low Demand

| Wed Feb. 2, 2011 8:07 PM EST

Normally, there's not much correlation between inflation expectations and asset prices. However, David Glasner has published a new paper showing that, beginning in 2008, this changed dramatically. If I understand his explanation correctly — and I'm not at all sure I do — the mechanism is fairly simple: when you enter a period in which real interest rates are low and investors expect very low inflation (or deflation), cash becomes your best investment. So investors pull their money out of assets and asset prices fall. In Glasner's paper, the S&P 500 is a proxy for asset prices, and he finds that, indeed, there's no correlation of the S&P 500 with inflation expectations through 2007. Then, starting in mid-2008, when interest rates go to zero and inflation expectations fall, the correlation suddenly becomes almost perfect: When inflation expectations drop, so do asset prices. Conversely, when inflation expectations go up, asset prices go up. Scott Sumner is excited:

There is no way to overstate the importance of these these findings.  The obvious explanation (and indeed the only explanation I can think of) is that low inflation was not a major problem before mid-2008, but has since become a big problem. Bernanke’s right and the hawks at the Fed are wrong.

....In my view the time-varying correlations between inflation expectations and stock prices are one of the most important pieces of evidence we have that [aggregate demand] became a problem after mid-2008. It will be interesting to see if those economists who are skeptical of demand-side explanations can come up with a plausible alternative explanation for this pattern.

Paul Krugman agrees: "It’s demand, all the way." Sadly, neither Glasner, Sumner, nor Krugman explain in terms someone like me can understand why this correlation implies that aggregate demand is what's behind our economic woes. I feel a bit like a dummy, since they seem to expect this to be obvious, but hopefully someone out there in the econ blogosphere will take pity and explain this in laymen's terms. When they do, I'll write a followup. In the meantime, apparently we have one more piece of evidence that our big problem right now isn't regulatory uncertainty or the federal debt level or structural unemployment. It's low aggregate demand, just like you'd expect.

Endgame in Egypt

| Wed Feb. 2, 2011 2:46 PM EST

I'm not quite sure who wrote this, but here's a report on the Egyptian protests from someone on Jon Chait's blog:

Today President Mubarak seems to have decided to crack down on the democracy movement, using not police or army troops but rather mobs of hoodlums and thugs. I’ve been spending hours on Tahrir today, and it is absurd to think of this as simply “clashes” between two rival groups. The pro-democracy protesters are unarmed and have been peaceful at every step. But the pro-Mubarak thugs are arriving in buses and are armed — and they’re using their weapons.

In my area of Tahrir, the thugs were armed with machetes, straight razors, clubs and stones. And they all had the same chants, the same slogans and the same hostility to journalists. They clearly had been organized and briefed. So the idea that this is some spontaneous outpouring of pro-Mubarak supporters, both in Cairo and in Alexandria, who happen to end up clashing with other side — that is preposterous. It’s difficult to know what is happening, and I’m only one observer, but to me these seem to be organized thugs sent in to crack heads, chase out journalists, intimidate the pro-democracy forces and perhaps create a pretext for an even harsher crackdown.

At the White House, today's events are causing a rapid change in emphasis: Mubarak needs to turn over power immediately. "Now means now," Robert Gibbs just told reporters. Stay tuned.

Why Do We Hate Our Cities?

| Wed Feb. 2, 2011 2:10 PM EST

Matt Yglesias on American urban policy:

Anyone actually interested in the subject will swiftly see that (a) American public policy is strongly biased against high density living and (b) that this outcome is predictable from the structure of American political institutions. That people don’t realize this is largely a matter of willful ignorance.

Here's a chart showing where the United States ranks in the world in terms of urban population:

We're 42nd out of 199, which makes us fairly urban, and the other advanced economies clustered around us include Germany, New Zealand, Denmark, Sweden, Canada, South Korea, Norway, and France. On this measure, we seem fairly typical. However, the density of our urban areas is quite low compared to other similar countries.

So is our rural/suburban bias due to our political institutions — in particular, the U.S. Senate, which overrepresents the residents of sparsely populated states? Or is it mostly due to geography and the relatively recent founding of our country, which have produced fairly low-density urban areas and therefore a naturally weaker constituency for high-density living? Is there some evidence on this point?

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What's the Conservative Plan?

| Wed Feb. 2, 2011 1:21 PM EST

Somebody help me out here. As near as I can tell, conservatives are now obsessed by the Muslim Brotherhood and the possibility that it will gain power in Egypt. And, in some vague way, they seem to blame the Obama administration for this possibility. But at the same time, they're four square in favor of dumping Hosni Mubarak and turning Egypt into a real democracy, and they vaguely blame the Obama administration for not being forthright enough about this as well.

So.....what's the conservative plan? Does anyone know? How are we supposed to (a) dump Mubarak, (b) support democracy, but (c) ensure that the Muslim Brotherhood is kept on the sidelines? Who's the go-to conservative if I want to know what their plan is?

Judge Vinson Revisited

| Tue Feb. 1, 2011 9:30 PM EST

A knowledgeable reader writes in to take issue with my earlier post about Judge Vinson's ruling on the constitutionality of the healthcare reform law's individual mandate provision:

As someone who works in health policy and has studied this issue pretty closely in consultation with several lawyers, I have to take issue with your assertion that:

"Judge Vinson simply decided to make up his own law and ignore precedent entirely."

This is simply not a fair reading of his decision which was eminently reasonable, if not necessarily correct. He discussed the relevant precedents in great depth and came to a conclusion that although the Commerce Clause does give the national government a virtually unlimited ability to regulate things that have a substantial impact on interstate commerce, this particular instance is beyond the pale.

You can, and I do, disagree with his reasoning in this area. I am a supporter of healthcare reform generally and a believer in the necessity of the individual mandate specifically. There are a lot of things that have been justified under the Commerce Clause that I find unjustifiable, but a mandate for this specific product is an exception that I would make if I were deciding these matters of law.

The reason that I write to you about this is that I really think that you (and other center-left commentators) are missing a very important point here, namely that Vinson both in his striking down the mandate and declaring that the provision cannot be severed, is acting well within controlling precedent. This decision would be radical in its impact but it is not a radical decision. Were the Court to rule against the entire healthcare law here, it would be objectively on much firmer precedential and textual ground than it was in Bush v. Gore (or for that matter Roe v. Wade, Buckley v. Valeo, Brown v. Board, etc.). We need to wake up to this reality and start dealing with it accordingly. In fact, we were aware of this early in the process and could have structured the requirement to make it pass constitutional muster (designing it as a tax rather than a penalty which we have attempted to do ex post to no avail).

So we'll see what happens. But the moment is coming that I have been dreading ever since my first correspondence with a friend (a Democrat who is a lawyer and former law review editor) who said when he first heard of this proposal in Hillary's healthcare plan ... "well, that's unconstitutional on its face."

Obviously I take a dimmer view of Vinson's decision: I just don't see how it jibes at all with current Supreme Court precedent. But if my reader is right, the Supreme Court itself might end up disagreeing with me.

I'm not sure what that would mean. My guess is that they won't throw out the entire law regardless; only the individual mandate will get overturned. If that's the case, then Republicans will be in a sticky situation. Democrats will pretty obviously be unwilling to repeal the rest of the law, but the health insurance industry will go bananas if everything else stays intact but the individual mandate goes away. They'd argue, with some justice, that this would essentially destroy them, and they'd demand that Republicans join with Democrats to do something about it. That would be hard pressure for Republicans to resist.

This is all still a couple of years away, since it still has to go through the appellate courts and I assume the earliest the Supreme Court could take it up would be in its 2012-13 session, with a decision handed down sometime in 2013. So we have plenty of time to think about it.

America's Love Affair With Ronald Reagan

| Tue Feb. 1, 2011 6:42 PM EST

I agree with Brendan Nyhan and others that Ronald Reagan didn't actually change Americans' attitude toward government that much. What's more, to the extent that attitudes did change, it was mainly thanks to a backlash against 70s liberalism that would have happened with or without Reagan.

Still, when Paul Waldman suggests that Reagan's popularity is a myth too, I think he takes a step too far. Reagan is pretty popular! With the exception of our weird ongoing love affair with John F. Kennedy, Reagan and Bill Clinton are routinely chosen in polls as the most popular postwar presidents. Likewise, Reagan and Clinton were basically tied for the highest approval rating when they left office.

This isn't too hard to understand, either. People mostly associate Reagan with recovery from a lousy economy, they associate him with the fall of the Iron Curtain, and they associate him with rebuilding America's prestige in the world. Maybe this is right, maybe it's not, but it's pretty understandable.

Generally speaking, even decades later presidents are mostly judged by how they did and how things were going during their last year in office. Things were going great for Kennedy, Reagan, and Clinton, so they're remembered very favorably. Things were going decently for Eisenhower, Ford, and Bush Sr., and they're remembered decently. Things were going badly for LBJ, Nixon, Carter, and Bush Jr., and they're remembered badly. The main exception seems to be Truman, who ended his presidency on a sour note but has since recovered pretty well.

In any case, maybe Reagan deserves his popularity, maybe he doesn't. Still, he's a pretty popular guy.

Huntsman for President! (In 2016)

| Tue Feb. 1, 2011 3:09 PM EST

Over at Democracy in America, Jon Fasman is trying to figure out why Jon Huntsman might be considering a run for the Republican presidential nomination this year:

Jon Huntsman was a successful governor, is a successful ambassador, is personable, handsome, accomplished, fluent in Mandarin and has all the makings of a major-party presidential candidate sometime in the future. Apparently, Mr Huntsman seems to have decided that the future is now: he will resign as ambassador to China in May and appears poised to run for president next year. This is a baffling decision....First, Republicans really don't like Barack Obama. Mr Huntsman has just spent two years as an Obama appointee....Second, why would he waste his candidacy this year? He brings moderation and an actual record of bipartisanship to a party and a primary electorate that seems interested in neither.

....The obvious answer, of course, is that he's leaping in because he thinks he can win.

Actually, I'd say the obvious answer is exactly the opposite. Huntsman's chances do indeed seem pretty slim in this election cycle — both in the primaries and in the general election. However, his name recognition is minuscule, and if he wants to run seriously in 2016 he needs to become better known. The best way to do that is to run in 2012. If he runs a decent, serious race, but loses to a more wingnutty candidate who then gets blown out by Obama, he'll have pretty good credentials for a 2016 run.

Now, I don't know if actual big-time politicians ever think this way. They seem to have an almost bottomless ability to believe against all evidence that they can win the presidency. (Fred Thompson? Seriously?) But Huntsman seems like a pretty smart, self-aware guy, and I wouldn't be surprised if he knows perfectly well that the odds are stacked against him. Most likely, what he's really doing is auditioning for 2016.